The benefit of inflation is punishing unproductive investments and keep capital in play. Which is why economists want 2-3% not 0. As such low long term capital gains taxes are a bad idea economically. Ideally the tax rate should increase for every year an asset is held. Such that there is no bias for liquidating new assets instead of old ones.
Which is effectivly the same as paying capital gains each year. On the flip side the annual rate could be set as low as 5% or capital gains = 1 - (0.95^(number of years)). Which is actually rather close to inflation targets.
Which is effectivly the same as paying capital gains each year. On the flip side the annual rate could be set as low as 5% or capital gains = 1 - (0.95^(number of years)). Which is actually rather close to inflation targets.